Riding around town these days, it’s easy to see a number of signs that indicate an organization is looking to hire staff. Quite a change from the not too distant past. So, it is a bit surprising to see people on some corners who have signs looking for a handout. Obviously, there has to be more to the story. When you see politicians talking about this or that bill or policy change is going to bring jobs to some sector, it raises a question of do we just need jobs or do we need good-paying jobs or jobs that meet particular needs of employees? What is the rest of the story?
Clearly a complex matter, especially when you do examine the other parts of the story. In this case, let’s look at the matter from the employer’s perspective. Nationally, we have an unemployment rate of 4.3 percent, a notable change from eight years ago. But here in Michigan, it is 3.8 percent, the lowest in 17 years. So, the effort to bring more jobs into the market place is not such a burning objective for many organizations. They are having enough trouble finding and maintaining desirable employees. Consequently, there is a rather significant interest in the various techniques to address the new employment environment. Obviously, recruitment issues and high turnover are not the same for all employers, but they are issues that are likely to become acuter in the next year or two, assuming consistent economic conditions.
Before moving on, I think it is notable that those employers who engaged in some marginal employee relations practices in the last business turndown are many of the ones who are experiencing the bigger problems now and may need some extra effort to get out of the hole they may have dug for themselves. Employees do remember their treatment and they do have some new tools like Glassdoor and other social media sites to share their perspectives. Or as they say, “What goes around, comes around.” Hopefully, our employers are looking down the road and may have learned some things for the future.
The simple lesson
But what is that lesson we should be learning? It really is rather simple. Bringing employees into the organization is expensive and turnover, for whatever the reason, is very costly in many ways. To calculate the cost is somewhat difficult and depends on a lot of factors and how much weight you put on the various factors. In recent years, there have been multiple studies that place the figure at anywhere from 25 percent of an annual position salary to 135 percent of the annual salary. Regardless of what figure you use, when that figure is multiplied by each position replacement, the numbers can add up to big-time money. With unemployment rates as noted above, a bigger problem actually may be getting the skilled staff needed in the first place.
This is a problem in many parts of the country, and if you have been involved in any recruiting, you will note that potential employees come from around the country. People are mobile and so you are competing for staff both locally and generally regionally. When I say competing, it includes retaining existing staff. Current employees are vulnerable if you aren’t paying attention to them.
What do you do about it?
The first step is to look at your existing practices. This means your practices from recruiting through compensation and benefits, as well as employee relations, training and development. Throughout this assessment, please consider the communication associated with these practices in terms of frequency, message and tone and who delivers the communication and how. This is not to say everything must change, but there may be parts that are a higher priority for required change. You may not be able to address all the pieces, but you should know what needs to be modified and a plan needs to be put in place to deal with the various matters as you can. Some will not be difficult; they just require change and a little education and re-enforcement.
One of the things you might likely find is that recruiting is being done the old-fashioned way, i.e., you let people know you have an opening and any applicant is run through the process, as cattle through a shoot, until you find the body you are looking for. Then you give them an offer. When they accept, you have a start day orientation where all the forms on your checklist are completed, and then the employee is turned over to the department supervisor. This is one form of “onboarding,” a new term often bandied about in HR circles when employees come to work for an organization. With this approach, you likely will run up against another term I recently was asked to comment on called offboarding.
What is onboarding?
First, let me explain what I think onboarding is all about. It is more than just getting a body to the department supervisor. Onboarding is a critical foundation-building function that prepares an employee to operate effectively within the current and future culture that the organization is striving for. It goes beyond the introduction phase after the employee is hired. It actually begins before the candidate selection phase, so that the right employees come into the sourcing process to improve the quality of candidates. Depending on employer circumstances, it may extend with periodic aspects into the first six months on the job.
The process involves clear goals and training for all staff. It can involve follow-up on multiple topics — both work related and personal. The intent is to plant the desired culture that supports the long-term objectives of the organization in a fashion that makes the individual feel “this is really the right organization for me” and want to stay, grow and contribute for the long haul.
This front-end investment has value and should integrate with the other employee engagement efforts to motivate and retain the employees to whom you’ve allocated organization resources to fulfill your staffing needs. Keep in mind that much of this discussion has been about employer actions from the employer’s point of view. Remember, the employee’s personal needs and objectives are just as important, or you will have to deal with the other new term, offboarding. This is when the employee bails out or the company decides the hire was a bad fit and needs to be terminated. I use the term “fit” because experience shows this is the factor that leads to termination much more frequently than inadequate skills or experience, as most organizations spend a lot of effort investigating these attributes. So, in a nutshell, onboarding pays good dividends when done effectively and is a hoax only when it is done in a haphazard fashion to get the orientation checklist completed.
Ardon Schambers is principal at P3HR Consulting & Services.